For long, critics have pointed out that Aadhaar – the ambitious Unique Identification project started by the United Progressive Alliance government in 2009 – functions without a legal framework. The project, which aims to assign a biometrics-based number to every resident of India, has been controversial, with activists pointing out the dangers of collecting identification data of residents in a country that lacks a privacy law. So far, the project has been run under an executive order, which means Parliament has no oversight over it.

Finally, it seems the project might get the cover of law.

The government on Thursday introduced the Aadhaar (Target Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016.

But this move has come under criticism.

The bill was introduced in the Lok Sabha as a Money Bill, which means it does not require the approval of the Rajya Sabha, where the Opposition is in the majority. This means the Opposition will be unable to force any amendments to the proposed legislation. Simultaneously, a previous bill, introduced in 2010, scrutinised by a standing committee, was withdrawn.

Even before the Lok Sabha debates the new bill, it has come under sharp scrutiny. Three questions are being asked by Opposition legislators and legal experts:

One, how justified is the move to introduce legislation on Aadhaar in the form of a Money Bill? Is this a ploy by the government to bypass the Upper House where it lacks a majority?

Two, does the bill address concerns over privacy?

Three, does the bill enable the government to make Aadhaar mandatory, overriding an order of the Supreme Court?

Debate over Money Bill

According to PRS Legislative Research, for a bill to be considered a Money Bill, it must contain provisions related only to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India, and matters incidental to such taxation, expenditure and related subjects.

The government has justified the move to introduce Aadhaar as a Money Bill, citing its significance to the delivery of welfare subsidies. The bill provides that the government may make the Aadhaar number a prerequisite for receiving any “subsidies, benefits, or services” on which expenditure is from the Consolidated Fund of India.

Finance Minister Arun Jaitley has argued that since the monetary allocations for government subsidy schemes will be disbursed from the Consolidated Fund of India, the Aadhaar bill can be termed a Money Bill.

But Opposition leaders are unconvinced.

In an email response to, Lok Sabha MP Tathagata Satpathy of the Biju Janta Dal questioned the government’s argument. “There are instances of several previous legislations, brought in through the normal process, that draw from the same fund [Consolidated Fund of India]. I wonder why this bill is being treated differently,” he said.

Satpathy added that the government was circumventing the Rajya Sabha. “This is a dangerous precedent to set because, in days to come, it will enable the government to do the same for other Bills too.”

Left members of Parliament in the Rajya Sabha objected to the bill too. “By no stretch of imagination can the Aadhaar Bill be termed a Money Bill,” said Brinda Karat, a Rajya Sabha member of Parliament from the Communist Party of India (Marxist). “It is because the government expects questions in the Rajya Sabha on it that they want to bypass the House altogether… The Speaker has a specific responsibility to prevent misuse of the clause which gives her the final say in such decisions and do what is in the interests of democracy.”

Independent Rajya Sabha MP Rajeev Chandrasekhar, however, said if the preamble of the Aadhaar Bill was amended – making it conditional for Aadhaar to be used alongside databases such as the Below Poverty Line database – then it could qualify as a Money Bill.

The final decision over whether or not Aadhaar is a Money Bill rests with the Lok Sabha Speaker, Sumitra Mahajan.

Privacy concerns

Biometrics collected under Aadhaar include the scan of all fingerprints, face, and the iris of both eyes. The demographic information includes name, date of birth, gender, residential address.

India does not have a comprehensive law on privacy. In the absence of this, legal experts and academics say, making Aadhaar mandatory has serious implications for the misuse of personal information and surveillance by the State.

While the government has said that the biometric information of those enrolled under Aadhaar will be safeguarded as per sections of the Information Technology Act, 2000, technology law experts say the adjudicatory system for disclosure of sensitive personal data under the IT Act has structural flaws and is not functional.

“Initial complaints for disclosure of sensitive personal data go to an adjudicating officer who is usually the IT Secretary of the state government and may not be trained in law,” said a technology lawyer. “There is no court infrastructure and no permanent seat for such cases. The appellate body, the Cyber Appellate Tribunal has not been made operational in the last three years. Hence, the civil remedies offered (in Aadhaar Bill) are at best illusionary and unenforceable.”

Section 33 of the Aadhaar Bill contains provisions for interception of Aadhaar’s demographic and core biometrics data, which will not be open to independent scrutiny. Section 33(2) permits disclosure pursuant to directions of a joint secretary in “the interest of national security,” but the phrase “national security” is undefined in the present Bill, or the General Clauses Act.

Further, the Bill contains no provisions for independent oversight, limitations on continuous surveillance, or notice to the person who is surveilled once the surveillance ceases.

Chinamayi Arun, who is executive director, Centre for Communication Governance at the National Law University Delhi said that the Bill provides very easy access to citizen information on the database to law enforcement agencies, without sufficient transparency or accountability. “It does not provide strict liability in case of a breach of information,” she said.

Legal scholar Usha Ramanathan pointed out that the Bill lacks provisions on notice to a person in case of breach of information, in case of third party use of data, or change in purpose of use of data – which were among provisions recommended by the Justice Shah Committee on Privacy in 2012 on an earlier Bill on the same Unique Identification project.

Expanding the scope of Aadhaar

While the government has stated that the aim of the Bill is to streamline government subsidies, legal experts say the phrasing in Section 7 provides for an ambit wider than government subsidies, and includes any benefits and services charged on the Consolidated Fund of India.

“The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India..”

Since the beginning of the programme in 2009, Nandan Nilekani, who led the Unique India Development Authority of India under the previous United Progressive Alliance government, had maintained that Aadhaar is voluntary. But to expand enrolment under the scheme, the United Progressive Alliance government, as well as the Modi government, pushed state governments to ask residents to produce Aadhaar cards to access various social schemes, to open bank accounts, to vote, to register a marriage, or even adopt a child.

A number of public interest writ petitions were filed in the Supreme Court against the coercive use of Aadhaar.

Between September 2013 and March 2015, the Supreme Court passed three orders saying the government cannot make Aadhaar mandatory and no one should be deprived of a public benefit or service for not possessing an Aadhaar number. Later, in October last year, it allowed the voluntary use of Aadhaar in seven specific schemes. The government has challenged the order.

A senior official in the cabinet secretariat overseeing the linking of Aadhaar numbers to bank accounts of beneficiaries under the direct benefits transfer scheme said: “The Supreme Court had allowed only its voluntary use in 6-7 schemes, but if everyone exercises the voluntary option, it defeats the purpose of the programme, and the new Bill will address this.”

Economist Jean Drèze, who had filed an affidavit in the Supreme Court over the government seeking to make Aadhaar mandatory for MNREGA workers, said the introduction of the Bill has at least ended the pretence that Aadhaar is voluntary.

“The Aadhaar project was sold to the public as a voluntary facility,” said Drèze. “The Supreme Court sensibly ruled that this would preclude making Aadhaar compulsory for any basic services. The government has reappropriated that power under the Aadhaar Bill, ending the pretence that Aadhaar is voluntary.”